A recent Doximity poll of 2,087 physicians found that 53% currently have a financial advisor. Additionally, 15% of physicians report that they plan to find a financial advisor soon.
Older physicians are more likely to have a financial advisor. Most physicians over 40 (64%) do, versus 43% of those under 40. As individuals age, the need for financial guidance may be heightened due to factors such as increased wealth and proximity to retirement. As Jonathan Cronin, MD, a Massachusetts neonatologist, put it, “Not having a trusted financial advisor is just reckless — especially as you approach retirement.”
In addition, 76% of women either have or plan to move forward with an advisor, versus 65% of men. Along the same lines, 30% of men report that they don't need a financial advisor, versus just 19% of women.
According to the poll, physicians in all but one specialty (neurology, at 41%) are more likely than not to have a financial advisor. Additionally, the preference for having an advisor does not neatly correspond with salary: Though one might expect increased wealth to correlate with increased likelihood of having a financial advisor, physicians in several of the highest paid specialties, such as orthopaedic surgery and thoracic surgery, are only moderately likely to have a financial advisor (59% for both), while several non-surgical specialists, like cardiologists (55%) and radiologists (52%), are even less likely, despite their relatively high compensation. Still, overall, surgeons do appear likelier to have a financial advisor than PCPs.
The question remains: How important is it to hire a financial advisor? The answer varies from person to person, but there are several arguments to keep in mind when weighing the decision of whether to hire an advisor.
One of the most salient arguments for hiring an advisor is that investment management is only part of what a financial advisor may offer — these are skilled professionals who can assist in retirement, estate planning, and managing finances in general. In addition, the finances and incomes of doctors tend to be more complex and sizable, and the time doctors have to manage them can be more restricted, so outsourcing to trusted advisors may be sensible.
On the other hand, the most salient argument against hiring an advisor is that, as numerous studies show, financial professionals often underperform the market. Further, physicians as a population are highly educated and quantitative, so they may be wholly capable of handling their own finances. As one physician, Murray Zedeck, DO, of Florida, put it, “No one has a greater interest in your assets than you.”
Ultimately, when it comes to finances, physicians are a unique group. They often graduate with significant debt, and then must make career choices with serious financial considerations: specializing or not, going into private practice or not, etc. Given the complexity of many physicians’ financial situations, it may be prudent for physicians to be aware of the fundamentals of money management — whether they hire an advisor or not.
Illustration by Jennifer Bogartz